A sum of money invested at compound interest amounts to Tk. 650 at the end of first year and Tk. 676 at the end of second year. The sum of money is?

Question: A sum of money invested at compound interest amounts to Tk. 650 at the end of first year and Tk. 676 at the end of second year. The sum of money is?

Solution:
Interest on 650 for one year = (676 - 650) Tk.
∴ I = 26 Tk.
Time, n = 1 year.
Principal, P = 650

We know,
∴ I = Pnr
⇒ r = I/Pn
⇒ r = (26 × 100)/(650 × 1)
∴ r = 4%

Again,
C = P(1 + r)ⁿ
⇒ 650 = P {1 + (4/100)}¹
⇒ 650 = P (26/25)
⇒ 26P = 650 × 25
⇒ 26P = 16250
⇒ P = 16250/26
∴ P = 625

∴ The sum of money is Tk. 625.